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Top 8 Pension Plans in the Indian Financial Market

Retirement Plans are also referred to as Pension Plans. They are basically investment plans that help you allocate a portion of your savings to accumulate over a period of time. They are designed to secure your future and guard you against unforeseen financial situations that may crop up after you retire. Investing in a couple of promising pension plans is a good financial decision.

Such investment plans not only secure you against bad weather, they also take care of your day to day financial needs so that you have a comfortable and stable financial situation even after you retire. Some of the most sought-after pension plans available in the Indian market are:

LIC Jeevan Nidhi Plan

The LIC Jeevan Nidhi Pension Plan is conventional with profits Pension Plan. It has both saving and protection features.

Under the sec 80CCC of the Indian Income Tax Act, the premiums paid are exempt from taxation. The policy term ranges between 5 to 35 years. The minimum vesting age is 55 years and the maximum vesting age is 65 years. The basic Sum Assured has no maximum boundary associated with it. Rs.1.5 Lakhs is the minimum basic Sum Assured under a single premium policy and Rs.1 lakh under a regular premium policy. The Policyholder stands to get guaranteed additions of Rs.50/thousand of the Sum Assured for every completed year, for the first five years. 6th year onwards the policy starts participating in profits of the company.

LIC Jeevan Akshay 6 Plan

This Plan is an immediate annuity plan. This pension plan is purchased with a large amount of money at one go as a single premium.

The premium that is paid is exempt from taxation. The minimum age to purchase this pension plan is 30, and the last age to purchase this pension plan is 85. No maximum boundary is attached to the annuity, buying price, etc. Pension can be received yearly, half-yearly, quarterly and monthly. For online distribution channels the minimum buying price is Rs.1.50 Lakhs and for the offline distribution channels the minimum buying price is of Rs.1 Lakh. A medical examination is not required in order to purchase this plan. In order to purchase this plan, it is mandatory to have and show age proof. The premium that is paid in lump sum.

HDFC Life- Assured Pension Plan

This Pension Plan is a ULIP that gives the policyholder returns linked to the market and loyalty additions.

The minimum age for purchasing the policy is 18 years, & the maturity age is 45 years. 11th year onwards the loyalty additions are made every other year. The HDFC Life-Assured Pension Plan offers its policyholder guaranteed returns or benefits and additional profits earned through the market. This Policy has single and limited payment options. The policyholder receives tax benefits as per the sec 80C and as per sec10 (10D) of the Income Tax Act 1961 if they choose to invest in this pension plan. In a scenario where the policyholder faces death, the nominee will stand to receive higher of the following

  1. 105% of the premium paid by the policyholder till the date of death
  2. Policy’s fund value

SBI Life Saral Pension Plan

This Pension Plan is a conventional pension plan. It is an individual and a participating plan. It offers its policyholder with protection against the market’s volatility and fluctuation.

The minimum age of vesting in this pension plan is 18 years, & the last age of vesting in the SBI Life Saral Pension plan is 65 years. 40 years is the minimum maturity age and the maximum is 70 years. There is no maximum boundary attached to the Sum Assured. However, the least Sum Assured must be Rs.1 Lakh. The minimum amount of premium that must be paid towards this policy is Rs.7,500 per annum. However, there is no maximum boundary attached to the same. The policyholder stands to receive guaranteed bonuses during the first five years. This pension plan has a high loan tenure associated with it. The loan tenure ranges between 10 to 40 years. On the maturity of this pension plan, the holder is assured of receiving the bonuses.

ICICI Pru- Easy Retirement Plan

If you choose to invest in ICICI Pru Pension Plan, you stand to receive regular income when your salary stops crediting in your account post-retirement. This Pension Plan invests in equity and hence generates long-term returns which give you financial security and protects you from the market volatility.

The policy tenure ranges between 10 to 30 years.  The minimum vesting age for this pension plan is 45 years, & the maximum vesting age is 80 years. The minimum age of investing in this pension plan is 18 years, & the last age of doing so is 70 years. There is no maximum boundary associated with the premium payment per annum. However, the minimum premium that needs to be paid per annum under this pension plan is Rs.48, 000. The payments can be made annually, semiannually or monthly. There are also lucrative tax benefits associated with this particular pension plan.

Max Life Guaranteed Lifetime Income Plan

It is a traditional, non-linked annuity plan. It offers its holder a regular flow of income post retirement.

The Max Life Guaranteed Lifetime Income Plan gives you the option of receiving lifelong payments. This means your spouse and you will receive payments till the end of life. The buying price of this pension plan is given back to the nominee of the plan after the demise of the policyholder. This Pension Plan gives you four annuity choices to select from. You can choose to receive pension annually, semi-annually, three-monthly or monthly. If the policyholder wishes to purchase the policy with a one-time lump sum amount, he or she has the option to do so.

Birla Sun Life Empower Pension

This Pension Plan is a ULIP & non-participating plan crafted to improve the holder’s savings after retirement.

The policy tenure can range from 5 years to 30 years. In order to invest in the Birla Sun Life Empower Pension plan, you should at least be 25 years old and not more than 70 years. You can select a risk level on the basis of your own risk-taking capacity. The policyholder has the choice to select the policy amount as per his/her discretion.

Reliance-Smart Pension

This is a ULIP & non-participating Plan that helps the policyholder systematically save and build a good chunk of money in order have a regular source of income post retirement.

The Policy tenure ranges between 10 years & 30 years. The policyholder stands to receive guaranteed loyalty additions. He also receives the double benefit of capital guarantee and equity participation. The minimum vesting age is 45 years, & the maximum is 75 years. If you invest in this policy plan, you will also receive tax benefits as per the sec 80C and sec 10 (10A) of the Income Tax Act 1961.

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